CANFIELD -- Rainbow Rentals said it has increased its credit to support its ongoing expansion but added that earnings will be lower than expected.
The Canfield-based operator of rent-to-own stores in 11 states said Thursday it has a new three-year, $25 million credit agreement from a bank group led by National City Bank. It replaces a deal that provided $11 million in credit.
"This expanded credit facility will provide the necessary capital to fuel our long-term growth strategy," said Wayland Russell, company chairman and chief executive. "Rainbow intends to continue its expansion program through new store openings, internal growth and selective acquisitions."
Earnings: The company also said it expects to report earnings less than its previous guidance of nine to 12 cents a share for the fourth quarter. The revision is the result of lower-than-expected revenues and higher-than-expected merchandise costs and store expenses, it said.
Revenue was about $24 million for the quarter and $94.5 million for the year, up 2 percent and 3 percent, respectively, over the comparable 2000 periods. At stores open at least a year, revenue increased about 1 percent for the quarter and fell about 4 percent for the year.
Rainbow, which operates 113 stores, will release fourth-quarter and full-year results Feb. 27.